The focus of this blog is on the wonders of government-run health-care everywhere but I also note the damage done to private medicine by a legal system that supports predatory litigation.

The long-established socialized medicine systems in Britain and Australia are a particularly relevant warning about where such systems end up.

Posts by John J. Ray (M.A.; Ph.D.)

Wednesday, July 29, 2009

More beds, not more bureaucrats, are what Australia's hospitals need

Australia shows where socialized medicine leads

RUDD should invest in a voucher scheme instead of taking over hospitals. It's a quarter of a century since Medicare was established, but no one is celebrating. No wonder, considering the critical condition of the public hospital system throughout Australia. Instead we have a 300-page reform blueprint from the National Health and Hospital Reform Commission.

At least the report has identified the main problem. The reality is that Australia's dangerously overcrowded public hospitals don't have enough beds to provide a safe and timely standard of care even for emergency patients. Unfortunately, the commission has strongly supported a range of non-solutions. The primary care reforms it proposes will not help our dysfunctional state-run public hospitals cope with an inexorable rise in demand from an ageing population.

Since 1983 the state health bureaucracies that are responsible for allocating funding, planning services and rationing public hospital care have cut the number of public hospital beds by one-third: from 74,000 beds to just over 54,000. This is a 60 per cent cut, taking population growth into account, from 4.8 public acute beds for every 1000 Australians to 2.5 beds.

Overcrowding occurs when bed occupancy exceeds 85 per cent in hospitals, operating near or beyond full capacity. Average bed occupancy in most leading metropolitan public hospitals is above 90per cent and hospitals routinely operate above 100 per cent occupancy because of political pressure to reduce electorally sensitive waiting times for elective surgery.

The nationwide bed shortage means one-third of emergency patients wait longer than eight hours for a bed to become available. Emergency staff spend more than one-third of their time caring for these patients, which leads to more than 30 per cent of patients not being seen in emergency departments within the recommended time.

The queue for free public hospital care now starts in crowded hospital corridors lined with ailing, mostly frail, elderly patients who are parked on trolleys for hours and sometimes days.

The pressure on hospitals is intensifying because rising numbers of older patients with complex conditions are requiring unplanned admission for bed-based medical and nursing care. In the past five years, admissions by patients aged between 75 and 84, and 85 and older, increased by 25 per cent. A decade ago, the 85-plus demographic wasn't even distinguished in the statistics.

The problem is not that hospitals are underfunded. Over the past decade, real expenditure on public hospitals increased by 64 per cent to top $27 billion in 2006-07. The real problem is that not enough of the money gets through to the frontlines. Between 1996 and 2006 the number of acute public hospital beds fell by 18 per cent per 1000. But between 2001 and 2006, the number of administrators increased by 69 per cent.

The large and costly area health services that administer public hospitals in most states are better at paying for bureaucrats than for beds, and have a deservedly notorious reputation among overworked hands-on hospital staff for warehousing armies of clerks and managers who have no involvement in patient care.

As more and more people live to older ages, a tsunami of demand will break in public hospitals. Increasing numbers of very old patients will inevitably require emergency and bed-based hospital care due to the age-related onset of chronic conditions. Going by the state of the health reform debate, the hospital crisis will become a catastrophe. The wrong-headed premise of the Rudd government's reform agenda is that the commonwealth must spend billions on a national network of comprehensive general practice "super clinics" to take pressure off hospitals.

The NHHRC has fully endorsed this approach. It claims that 10 per cent of public hospital admissions can potentially be prevented by providing better co-ordinated primary and allied health care for chronically ill and elderly patients.

Yet even the discussion paper on the subject commissioned by the commission shows that trial co-ordinated care programs have failed to keep people out ofhospital.

The 15 per cent boost in bed numbers recommended by the commission is welcome. But even if the government accepts this, a one-off and costly boost in bed numbers is not a long-term solution.

Instead of wasting money building stand-alone elective hospitals and wasting political capital trying to take full responsibility for the primary care system, the Rudd government should focus on structural reform of the hospital system.

Flexible and responsive funding and administrative arrangement must be created to allow hospitals to increase the supply of beds and meet the demand that rising numbers of older and sicker patients will generate in coming decades.

The first step towards rebuilding the hospital system is for the commonwealth to take full control of public hospital funding and introduce Medicare-issued, case-mix-calculated hospital vouchers to pay for treatment in either public or private hospitals. The second step is for state governments to agree to re-introduce local public hospital boards with full financial and administrative responsibility for their facilities. The third step is to close down the area health services and use the money saved to fund vouchers and open and staff more hospital beds.

This isn't a plan for Canberra to take over and run hospitals. Funding will be centralised by converting the present federal grants and state hospital budgets into vouchers, while the management of hospitals will be decentralised to local boards. Nor is this a plan to privatise the health system. Tying taxpayer funding to the treatment of patients, increasing choice and competition, and freeing hospitals to respond appropriately to the health needs of the community is not that radical.

This parallels the voucher-based policies the Rudd government is considering implementing to increase efficiency and improve access to publicly funded education in schools, TAFE and universities.

A 50 per cent increase in patients presenting at emergency aged over 85 is predicted over the next five years alone. Bed numbers must increase significantly to equip the hospital system to cope with the unprecedented impact of demographic change. The challenge for policy-makers is to dispense with the failed methods of running public hospitals that have created a continuing crisis 25 years in the making.

President Obama's strategy to pass sweeping health care legislation rested on stealth and speed. The idea was to fill the conversation for months on end with vague talk about expanding coverage, "bending the cost-curve," improving quality, and rooting out waste, without showing the public how the plan would actually work or what it would cost. Legislation, meanwhile, would be composed behind closed doors, and the bills would be introduced as close as possible to when they might come up for a vote to minimize the time in which they could actually be read and thought about by those who would vote on them and those who would live under them. By the time the details emerged, maybe momentum and being "closer than ever before" would be enough to overcome the torrent of objections that were sure to be raised when people got a real look at the nuts and bolts.

That moment has now come. House Democrats finally unveiled their plan on July 14, with the aim of passing it by July 31, the last day before the August congressional recess. The Senate's Health, Education, Labor, and Pensions Committee has released its part of the plan, but the Finance Committee (which must figure out how to pay for it all) has yet to do so. There, too, the leadership hoped for a vote before the recess.

But things have not gone as the Democrats intended. As details have emerged, an extraordinary wave of public concern has washed over the debate and left the plan's champions reeling. It is all but certain that both the House and Senate will recess for August without voting on health care, despite the president's insistence on its urgency. And the emerging tone of the public debate casts serious doubt on the fate of Obamacare more broadly.

The reasons for the public revolt are easy to see. The Democrats want to spend $1.5 trillion over a decade, impose an $800 billion tax increase in the midst of the worst recession in a generation, increase federal borrowing by $239 billion (on top of the $11 trillion the Obama budget already requires us to borrow through 2019), impose costly mandates on employers that will discourage hiring as unemployment nears 10 percent, force individuals to buy one-size-fits-all government defined insurance, and insert the government in countless new ways between doctors and patients. All of that would occur whether or not the plan includes a "public option," which at this point it does include and which will exacerbate all of these problems.

As these facts have become clear, Obama's standing has fallen and public opinion has grown decidedly less enthusiastic for the administration's approach. The trend is likely to continue, because the details of the plan reveal that its two most serious drawbacks--its cost and the prospect of government rationing--are worse than even most of their critics have grasped.

First, there are massive hidden costs inherent in a little-understood provision of the plan. The centerpiece of Obamacare is a new premium subsidy program. In the House bill, families with incomes up to four times the poverty level would get a fixed cap on their insurance premiums, tied to their incomes. For instance, a family whose income is twice the poverty level would pay no more than 5 percent of its total income for insurance. But providing that guarantee to all such households in America would cost far more than even the Democrats are willing to propose. The plan therefore would make subsidies available only to households getting insurance through the new "exchanges," insurance pools set up in each state as a parallel system to job-based coverage. And full-time workers in all but the smallest firms would be barred from entering the exchanges, at least for a time, so they wouldn't have access to the new entitlement.

President Obama has made many promises about his health-reform agenda, but none looms larger than: "You will save money." Not only has the president promised to lower consumers' health-insurance bills; he says his plan will trim federal spending as well. Thus, when the head of the Congressional Budget Office (Congress's fiscal watchdog) testified last Friday that none of the bills under consideration in the House or Senate would rein in spending--and that all would likely increase it--the president's reform push took a heavy hit. The CBO's assessment underscored an important reality about health care. Lowering health-care costs (which have been rising faster than inflation for decades, except for a brief perio! d in the 1990s) while improving quality is possible, but it's awfully hard, for one simple reason: when it comes to health-care spending, death is the only really cheap option.

William Osler, a renowned nineteenth-century doctor and the first physician-in-chief at Johns Hopkins Hospital, once remarked, "Pneumonia may well be called the friend of the aged. Taken off by it in an acute, short, not often painful illness, the old man escapes the 'cold gradations of decay,' so distressing to himself and to his friends." If Osler were alive today, he might call pneumonia the friend of Medicare accountants, since it kills victims quickly, in contrast with the lingering and expensive chronic illnesses that account for about three-quarters of all Medicare spending.

Few policymakers working on health-care reform in Washington stop to consider the obvious corollary: dying early is cheap, and keeping people alive long enough to collect Medicare is expensive. Instead, experts talking about health spending promulgate what I call the Eat Your Vegetables Theory: we can save gobs of money by focusing on technological fixes (like electronic health records) and disease prevention, which will yield a healthier population that is cheaper to treat. The savings generated can then be used to subsidize coverage for millions of the uninsured. But this approach is unlikely to work as advertised: as Osler's dictum suggests, increasing prevention efforts may wind up costing more.

Take pneumonia. We have relatively cheap and effective treatments for it, especially vaccines and antibiotics. As a result, many older Americans who might have died from pneumonia in Osler's day now live years or decades longer--long enough to qualify for Medicare and then develop much more expensive ailments like diabetes, cancer, and Alzheimer's. Researchers at the RAND Corporation noted the conundrum across several studies and came to roughly the same conclusion: "Medical innovations will result in better health and longer life, but they will likely increase, not decrease, Medicare spending."

In one study, the researchers postulated three different scenarios for the health costs of seniors entering Medicare from 2002 to 2030. Scenario A took into account everything that we know today about the health of the current cohort of seniors entering Medicare and future enrollees, up to 2030. (This is a mixed bag. Seniors' health started improving in the 1980s, but rates of chronic diseases have been increasing rapidly in recent years, and newer enrollees are likely to be sicker and thus more expensive.) Scenario B assumed that future cohorts would be as healthy as those in the 1990s. And Scenario C (the most optimistic) assumed that seniors' health would continue to improve. Under rosy Scenario C, the researchers found, health spending would be $10,275 per Medicare enrollee in 2030--just 8 percent lower than under Scenario A. Why? Healthier seniors live longer and accumulate more costs; also, costs are rising faster among less disabled seniors, presumably because they! use more new drugs and devices that prevent them from becoming disabled (knee replacements, for example).

In another study, RAND researchers looked at how ten important medical innovations likely to emerge in the near future might affect Medicare spending in 2030. These included anti-aging compounds for healthy people, cancer vaccines, tiny defibrillators implanted near the heart, better treatments for stroke and cancer, and Alzheimer's prevention. Every hypothetical innovation, the researchers found, would increase Medicare spending. Even the cheapest, an anti-aging compound taken by healthy people that would cost just $11,245 per life-year saved, would increase health-care spending by 14 percent in 2030--because there would be 13 million more beneficiaries collecting benefits.

Finally, RAND examined the effects of fighting four risk factors for heart disease. If we could get all the elderly to stop smoking and control their diabetes, their health would improve, of course, but costs would rise, again because those ex-smokers and diabetics would eventually be vulnerable to other health problems. If we effectively treated hypertension and slashed obesity rates by 50 percent, however, health would improve and costs would fall. Reducing obesity produced the clearest gains because obesity, though it sharply increases costs, doesn't reduce longevity significantly.

What all three studies suggest, then, is technological innovations or disease prevention will likely result in slight savings or even increased costs (though obesity may be the exception to this trend). This doesn't mean, of course, that we shouldn't keep inventing drugs and devices to keep people alive longer, or that we shouldn't develop better prevention strategies. It just means that we should stop pretending that good health is always cheaper. Sometimes, you really do get what you pay for.

Health and Human Services Secretary Kathleen Sebelius tried to reassure citizens in New Orleans this week that Obamacare bureaucrats will make sound medical decisions for all Americans. She failed. Under the government-run plan, she promised, a team of health care experts will recommend what should be covered: “I think it would be wise to let science guide what the best health care package is.”

Gulp. It’s precisely the Obama administration’s view of sound “science” that should send chills down patients’ spines. Case in point: The president’s prestigious science czar John Holdren refuses to answer questions about his radical, published work on population control over the last 30 years.

Last week, I called the White House Office of Science and Technology Policy (OSTP) to press Holdren on his views about forced abortions and mass sterilizations; his purported disavowal of Ecoscience, the 1977 book he co-authored with population control zealots Paul and Anne Ehrlich; and his continued embrace of forced-abortion advocate and eugenics guru Harrison Brown, whom he credits with inspiring him to become a scientist.

After investigative bloggers and this column reprinted extensive excerpts from Ecoscience, which mused openly about putting sterilants in the water supply to make women infertile and engineering society by taking away babies from undesirables and subjecting them to government-mandated abortions, the White House issued a statement from Holdren last week denying he embraced those proposals. The Ehrlichs challenged critics to read their and Holdren’s more recent research and works.

Well, I did indeed read one of Holdren’s recent works that reveals his clingy reverence for, and allegiance to, the gurus of population control authoritarianism. He’s just gotten smarter about cloaking it behind global warming hysteria. In 2007, he addressed the American Association for the Advancement of Science conference. Holdren served as AAAS president; the organization posted his full slide presentation on its website.

In the opening slide, Holdren admitted that his “preoccupation” with apocalyptic matters such as “the rates at which people breed” was a lifelong obsession spurred by scientist Harrison Brown’s work. Holdren heaped praise on Brown’s half-century-old book, “The Challenge to Man’s Future,” then proceeded to paint doom-and-gloom scenarios requiring drastic government interventions to control climate change.

Who is Holdren’s intellectual mentor, Harrison Brown? He was a “distinguished member” of the International Eugenics Society whom Holdren later worked with on a book about – you guessed it – world population and fertility. Brown advocated the same population control-freak measures Holdren put forth in Ecoscience. In “The Challenge to Man’s Future,” Brown envisioned a regime in which the “number of abortions and artificial inseminations permitted in a given year would be determined completely by the difference between the number of deaths and the number of births in the year previous.”

Brown exhorted readers to accept that “we must reconcile ourselves to the fact that artifical means must be applied to limit birth rates.” If we don’t, Brown warned, we faced a planet “with a writhing mass of human beings.” He likened the global population to a “pulsating mass of maggots.”

When I pressed Holdren’s office specifically about Holdren’s relationship with Harrison Brown, press spokesman Rick Weiss told me he didn’t know who Brown was and balked at drawing any conclusions about Holdren’s views based on his homage to lifelong intellectual mentor, colleague and continued inspiration Brown just two years ago.

Weiss lectured me rather snippily about the need for responsible journalism (he was a Washington Post reporter for 15 years). He then me not to expect any response from Holdren’s office to my question on whether Holdren disavows his relationship with a eugenics enthusiast who referred to the world population as a “pulsating mass of maggots” and championed a scheme of abortion and artificial insemination quotas. If this is the kind of ghoulish “science” that guides the White House, we can only hope that Obamacare is dead on arrival.

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Background

Postings from Brisbane, Australia by John Ray (M.A.; Ph.D.) -- former member of the Australia-Soviet Friendship Society, former anarcho-capitalist and former member of the British Conservative party.

This blog gives a lot of attention to events in Australia and Britain -- places where there already exist systems similar to the one most likely to befall the USA if the Democrats get their way -- "Free" medical care supposedly available to all through government hospitals but with a competing private sector as well. The Canadian system is considered too Soviet to provide a likely model for the USA

TERMINOLOGY: Many of my posts concern the very instructive state of socialized medicine in Australia. Like the USA, Germany and India, Australia has a system of State governments which have substantial independence from the central (Federal) government and it is they who are mainly responsible for "free" health services. It may therefore be useful to some for me to note the standard abbreviations for the States concerned: QLD (Queensland), NSW (New South Wales), WA (Western Australia), VIC (Victoria), TAS (Tasmania), SA (South Australia).

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

Conservatives do NOT object to helping the poor. Government welfare legislation in aid of the poor was in fact first introduced by conservatives -- Bismarck and Disraeli in the 19th century. What conservatives want is for the help to be delivered in a sane manner. And anyone who thinks that government bureaucracies can run hospitals well is completely out of touch with reality.

One of the oldest "free" public hospital systems in the world is that in the Australian State where I live: Queensland. It dates from 1944 (Britain's NHS began in 1948). So its advanced state of decay reveals well where the slow cancer of bureaucracy ends up. It now has three "administrative" employees for every medical employee. All those clerks are really good at curing people, I guess! Frequent bulletins on the flailing but ineffectual attempts to "fix" the system will appear here -- as well as bulletins on the dreadful things it does to patients and the long waits they endure.

On all my blogs, I express my view of what is important primarily by the readings that I select for posting. I do however on occasions add personal comments in italicized form at the beginning of an article.

I am rather pleased to report that I am a lifelong conservative. Out of intellectual curiosity, I did in my youth join organizations from right across the political spectrum so I am certainly not closed-minded and am very familiar with the full spectrum of political thinking. Nonetheless, I did not have to undergo the lurch from Left to Right that so many people undergo. At age 13 I used my pocket-money to subscribe to the "Reader's Digest" -- the main conservative organ available in small town Australia of the 1950s. I have learnt much since but am pleased and amused to note that history has since confirmed most of what I thought at that early age.

I imagine that the the RD is still sending mailouts to my 1950s address!

NOTE: The archives provided by blogspot below are rather inconvenient. They break each month up into small bits. If you want to scan whole months at a time, the backup archives will suit better. See here or here